Helping Working People - My Arse

Increasing the minimum wage, increasing National Insurance costs to employers and failing to increase income tax thresholds are three significant areas that the current Labour Chancellor has portrayed as helping working people. Sadly it demonstrates a lack of ability to work out winners and losers from her policies.

In reality several things have happened. In my old home area of Lincolnshire the food industry has sought to decrease its reliance upon full time employees and increased usage of agency workers as and when required. This has seen people dismissed or made redundant to then, in some cases, ending up working in the same factory only in a less secure agency position on lower pay. Frankly fire and rehire through the back door brought about by government policy. This is a disappointing behaviour from the larger firms that show good profitability as it has seen an outing of people that worked all hours through the Covid pandemic when labour was short to be replaced by a cheaper alternative. This would have happened to a much lessor level if the National Insurance threshold had not been lowered incurring a massive cost on wage bills.

Added to this are the smaller firms that service both the food and farming industry. The farm inheritance tax saw a reduction in orders of machinery, building and investment that has hit most rural support businesses. Coupled with the National Insurance cost this has seen a massive reduction in recruitment and I am starting to see employment reduce through natural wastage as people leave or retire and are not replaced.

Businesses large and small are looking to not increase wages, despite the cost of living increase. Wages combined with energy costs are making some business operations unviable.

If we move to my current home on the Northumbrian coast where tourism and hospitality is a major employer we see similar issues. Employers are reducing hours and casual staff are a more attractive alternative. People that have gotten around this by having two or three jobs have found that employers do not want them if they do this due to the extra tax bill they incur on National Insurance. Yes this is pretty poor of them, but hospitality is run on extremely tight margins with price sensitivity to the point that commercial viability is challenged.

This has resulted in a fall in employment opportunity in the coastal tourist areas. This is further not helped by certain attractions favouring the unpaid employment of volunteers, easily available in gentrified fashionable coastal areas, to the detriment of mostly young people.

So in both Northumbria and Lincolnshire I see a reduction of income, hours and working opportunity for people as a direct result of government policy. Added to this is decreased job security and increased uncertainty combined with rising cost of living. Effectively all this is combining to increase hardship and poverty of working people.